Labour promises permanent mortgage guarantee scheme to get 80,000 young people on housing ladder

The party said that half of young first-time buyers now receive financial support from family to buy their home, with an average gift of £25,000.

Children of homeowners are twice as likely to own their own homes in comparison to children of renters.

Sir Keir Starmer, leader of the Labour Party, said: “After 14 years of Conservative government, the dream of homeownership is out of reach for too many hard-working people. 

“Despite doing everything right, they can’t move on and up. A generation faces becoming renters for life. My parents’ home gave them security and was a foundation for our family. As prime minister, I will turn the dream of owning a home into a reality.”

The announcement came before the Conservative government’s Help to Buy scheme ends in the middle of next year, with the latest data showing that the number of homes purchased under the scheme had dropped by 41%.

Angela Rayner, Labour’s deputy leader and shadow housing secretary, said: “Labour’s new Freedom to Buy scheme will deliver for working people across the country. 

“We will deliver more action on housing in the first year of a Labour government than this crumbling Conservative government has managed in over a decade.”

Labour has pledged to build 1.5 million homes if it is elected in the next parliament, to reintroduce housing targets, build on disused grey belt land, and fast-track permissions on brownfield sites. 

Commenting on the announcement, campaign group Generation Rent said “renters deserve security too”.

Chief executive Ben Twomey said: “While attention to the housing struggles of young adults is welcome, our work or personal circumstances mean not all of us are able to live at home with parents until we save enough to buy our first home. 

“12 million people are privately renting right now and more than half of us have no savings at all.”

He said the proposed scheme would make permanent the existing ability for people to buy their first home with just a 5% deposit. 

“But 5% still means £12,497 on the average first-time buyer mortgage, and as much as £21,669 if looking to buy in London. 

“If rent rises continue to outpace wage growth, more tenants could face homelessness than benefit from this scheme,” he said.

Kate Henderson, chief executive of the National Housing Federation, said: “Providing more people with access to homeownership should be one part of a holistic approach to solving this crisis, with shared ownership being a key option for first time buyers.

"In order to ensure all have access to the home they deserve, however, this must sit alongside a major investment in a new generation of social homes, the most affordable and secure tenure for people on low incomes, as part of a nationally coordinated fully funded long-term plan for housing.”

However, the boss of Shelter said that another home ownership scheme "that helps only a small minority and ignores the core of the problem isn’t going to cut it".

Polly Neate added: "Many people in this country are closer to homelessness than homeownership. If political parties are serious about giving people ‘security’ in their homes, there’s only one way to do it.

"With 1.3 million households stuck on social housing waiting lists and the country haemorrhaging social homes through sales and demolitions - we need to build 90,000 social homes a year with rents tied to local incomes. And politicians must get on with renting reform - no-fault evictions must be abolished, and renting made safer, secure and more affordable.”

Inside Housing reported last week how the Labour Party is also considering a manifesto pledge to tackle the UK’s homelessness crisis with a national expansion of Housing First.